Consumer willingness to pay for vehicle attributes: What do we know?

As standards for vehicle greenhouse gas emissions and fuel economy have become more stringent, concerns have arisen that the incorporation of fuel-saving technologies may entail tradeoffs with other vehicle attributes important to consumers such as acceleration performance. Assessing the effects of these tradeoffs on consumer welfare requires estimates of both the degree of the tradeoffs, and consumer willingness to pay (WTP) for the foregone benefits. This paper has two objectives. The first is to review recent literature that presents, or can be used to calculate, marginal WTP (MWTP) for vehicle attributes to describe the attributes that have been studied and the estimated MWTP values. The authors found 52 U.S.-focused papers with sufficient data to calculate WTP values for 142 different vehicle attributes, which they organized into 15 general groups of comfort, fuel availability, fuel costs, fuel type, incentives, model availability, non-fuel operating costs, performance, pollution, prestige, range, reliability, safety, size, and vehicle type. Measures of dispersion around central MWTP values typically show large variation in MWTP values for attributes. The authors explore factors that may contribute to this large variation via analysis of variance (ANOVA) and find that, although most have statistically significant effects, they account for only about one third of the observed variation. Case studies of papers that provide estimates from a variety of model formulations and estimation methods suggest that decisions made by researchers can strongly influence MWTP estimates. The paper’s second objective is to seek consensus estimates for WTP for fuel cost reduction and increased acceleration performance. Meta-analysis of MWTP for reduced fuel cost indicates that estimates based on revealed vs. stated preference data differ, as do estimates from models that account for endogeneity and those that do not. The authors find greater consistency in estimates of MWTP for acceleration despite substantial uncertainty about the overall mean. The authors conclude with recommendations for improving the understanding of consumers’ MWTP for vehicle attributes.

• Record URL:
  https://doi.org/10.1016/j.tra.2018.09.013
• Record URL:
  http://www.sciencedirect.com/science/article/pii/S0965856417308546
• Availability:
  • Find a library where document is available. Order URL: http://worldcat.org/issn/09658564
• Supplemental Notes:
  • © 2018 Elsevier Ltd. All rights reserved. Abstract reprinted with permission of Elsevier.
• Authors:
  • Greene, David
  • Hossain, Anushah
  • 0000-0002-5716-292X
  • Hofmann, Julia
  • Helfand, Gloria
  • Beach, Robert
  • 0000-0001-8549-8546
• Publication Date: 2018-12

Language

• English

Media Info

• Media Type: Web
• Features: Appendices; Figures; References; Tables;
• Pagination: pp 258-279
• Serial:
  • Transportation Research Part A: Policy and Practice
  • Volume: 118
  • Issue Number: 0
  • Publisher: Elsevier
  • ISSN: 0965-8564
  • Serial URL: http://www.sciencedirect.com/science/journal/09658564

Subject/Index Terms

• TRT Terms: Analysis of variance; Automobiles; Automobiles by type; Consumer behavior; Costs; Environmental impacts; Fuel consumption; Operating costs; Passenger comfort; Performance; Purchasing
• Uncontrolled Terms: Attributes (Features); Willingness to pay
• Subject Areas: Economics; Highways; Vehicles and Equipment;

Filing Info

• Accession Number: 01682745
• Record Type: Publication
• Files: TRIS
• Created Date: Oct 5 2018 9:27AM